Will America Go For It?
Interestingly enough, the Treasury Department actually halted the production of the one dollar coin because of the widespread resistance to the metal coin in place of the paper reserve note. In fact, it holds about $1.4 billion in dollar coins, and slowed production has saved the government some $50 million dollars since last December. According to Treasury, resistance from vending machine makers and a lack of demand for coin dollars warranted the stop, but with the economy still struggling to recover wear and tear on smaller bills like $1's and $5's has increased since they're exchanged more often than $20's or $100's.
How Hard Would The Changes Be?
Converting small bills to coins would be a fairly simple task, particularly because the Treasury already has $1.4 billion in dollar coins ready to go into circulation. All it would need to do is replace paper dollars with coins as the paper notes leave circulation or are destroyed, and eventually the supply of paper dollars would be completely supplanted by the coins. The bigger problem is finding a new makeup for the penny and nickel, and there are few proposals on the table. During WWII these coins were minted from steel to conserve copper for the war effort, but now steel would prove a cheaper alternative since prices for steel are much cheaper than copper or zinc. The Mint could also stand to find a cheaper alternative to buying prefabricated (they come ready-to-stamp) coins ,a process that accounts for much of the added costs of these coins.
Overall this is a pretty good idea, especially with the federal government looking for any way to save money. Personally I'd like to see coins for the $1 and the $5 bills since they're exchanged enough to limit their lifespan to just under five years. Keep in mind that other countries such as Great Britain, Canada, and the EU countries use coins for amounts larger than one full unit of their currency and transactions work just as well. With the fiscal cliff looming, any idea that saves some money is a good idea and why not? Those pennies add up!